Doing Without Money: A critical assessment of Woodford's analysis
AbstractWoodford employs an inter-temporal general equilibrium model to examine the properties of the monetary system as it evolves form the use of a physical medium of exchange to an electronic medium. He presents a structure in which cash as a means of payment can be made to vanish at the limit but where he claims the price level remains determinate. It is shown that Woodford's analysis involves fundamental but still widespread conceptual and methodological errors. His general equilibrium model does not map into the world of electronic money and his analysis has no implications for the art of central banking.
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Length: 33 pages
Date of creation: 03 Nov 2004
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Electronic money; Cashless limit; Hahn property; Accounting systems of exchange;
Find related papers by JEL classification:
- B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
- E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
- E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
This paper has been announced in the following NEP Reports:
- NEP-CBA-2004-11-07 (Central Banking)
- NEP-HPE-2004-11-07 (History & Philosophy of Economics)
- NEP-MAC-2004-11-07 (Macroeconomics)
- NEP-MON-2004-11-07 (Monetary Economics)
- NEP-MON-2004-12-21 (Monetary Economics)
- NEP-PKE-2004-11-07 (Post Keynesian Economics)
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